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Funding issues in full focus

Funding issues in full focus

Whatever the discussion, the answer is funding related.

The overriding theme of the 2023 Local Government New Zealand (LGNZ) conference was that the funding model for local government needs to change.

Mayors, chairs, councillors, and other local government representatives and stakeholders spent two days in Christchurch where engagement, delivery, and strategic future-focussed decision were among the key talking points.

Two days of rubbing shoulders with his peers has its benefits, Ashburton Mayor Neil Brown said.

“Networking with the other councils to see if their issues are our issues, discussing solutions and getting advice.”

The conference is the only opportunity each year the sector gets to come together to deliberate and collaborate and this year, like most, funding was the underlying issue.

Primarily, how there is never enough.

When it comes to funding raised in New Zealand through taxation, including rates, around 10% is in the hands of local government.

That is set to decrease even further when central government takes over three waters operations.

Statistically, that is the lowest in the developed world, Brown said.

“Councils shouldn’t have to go cap in hand to the Government for funding to do some major infrastructure."

The recent independent Future For Local Government (FFLG) recommendation report highlighted the need for broad system changes, including that rates are no longer enough to fund councils to do what they need to, and what their communities want them to do.

The big push coming out of the LGNZ conference is for localism – empowering the voice of communities to make decisions rather than the buzz of the beehive.

Local councils know what their communities need and don’t need, so decisions should be getting sent up the line, not always coming down, Brown said.

A key contrast between local and central government was forward planning ability.

Central Government works on three year terms where the direction and decisions can change with each government.

Local government also operates on three-year terms, but councils have continuity in their direction no matter who is elected, because of its long-term plan structures.

“Councils do work well planning into the future and as new councillors come in they just pick it up and carry on with it.”

Whenever there is a change of government, they pick up and dump projects which stymies progress, he said.

New LGNZ president, Selwyn Mayor Sam Broughton, spoke of adapting to changes on the horizon for the sector.

He issued a challenge for councils to work together, rather than in opposition.

Councillors are elected to represent their community, but Broughton said sometimes the thinking needed to cross borders and consider the wider community.

No longer a 'we and them', but an 'us' ideology for the greater good.

“The way that we are working is not sustainable for all of us moving forward. The future of local government is a conversation that at the moment is ours to run with.”

The recent FFLG recommendation report and its recommendations lay in wait for the next government, with both Prime Minister Chris Hipkins and National leader Chris Luxon saying they will take the lead from the local government sector.

“And we’ll hold them to that,” Brown said.

Hipkins and Luxon were all saying the right things, but the question remains around whether they will deliver, Brown said.

After two days of talking about wanting change, the challenge for the local government sector is to put it into action.


The key voices

Chris Hipkins

Prime Minister Chris Hipkins said a partnership approach between central and local government was necessary, “not just in terms of policy and strategy, but in terms of actual on-the-ground action”.

“That relationship isn’t always going to be easy and seamless, and there is always going to be a bit of a tension."

As LGNZ re-launched its localism campaign, Labour’s stance was described as pushing in the other direction for centralisation.

“We do have a quite centralised model of government service delivery in New Zealand and that means there are quite a few government agencies for local government to engage with,” Hipkins said.

The FFLG report landed at a “challenging time” and that meant recovery efforts are taking precedence over reform in the short term, Hipkins said.

Christopher Luxon

National’s Christopher Luxon laid down the election race between Labour and National as a vote for “centralisation and control or localism and devolution”.

National is pledging to focus on long-term infrastructure planning and establishing a “city and regional deals” model.

“Priority investments that will deliver the most impact, make the most difference to the most amount of people, in the fastest amount of time in each sub-region of New Zealand,” Luxon said.

“Too often the relationship between central and local government has broken down, mainly due to the gap between what central government wants and actually what local government can afford."

Kieran McAnulty

A number of the questions to Local Government Minister Kieran McAnulty circled the FFLG review. He stood by the position that it wouldn’t be touched until after the election, so the local government sector had time to collaborate on its position to present a consensus view.

“[Rates] as the sole source of revenue for councils is unsustainable.

“There are many things your communities expect you do but you simply can’t because you are constrained, either by a debt cap or by your community’s ability to pay more.”

When it came to devolution, McAnulty said there are examples overseas but “I’m not sure something like that fully is appropriate for New Zealand”.

“I’m not sure local councils want to run the police.”

The genuine challenge is for the local government sector to present a funding solution for a local government minister to take to cabinet, he said.

By Jonathan Leask